AGC economist cautious as construction employment hits six-year high

Construction employers added 6,000 workers in May as the industry’s unemployment rate dropped to 8.6 percent, its lowest mid-spring level in six years, according to an Associated General Contractors of America analysis of federal government data.

Employment gains remain spotty and thousands of highway construction jobs are at risk due to federal funding uncertainties, notes AGC Chief Economist Ken Simonson. “Even with five straight months of construction employment gains, the industry remains vulnerable to sudden shifts in demand,” he says. “Unless lawmakers act to head off an expected disruption in highway funding, the sudden loss of billions of dollars worth of demand would cost many construction workers, as well as workers from other segments of the economy, their jobs.”

Construction employment eclipsed 6 million in May, the highest total since June 2009 and an increase of 188,000 or 3.2 percent from a year earlier. Residential building employers added 3,300 jobs in May and 105,600 (4.9 percent) over 12 months. Nonresidential construction firms added 2,700 employees since April and 82,000 (2.2 percent) since May 2013. The unemployment rate for workers actively looking for jobs and last employed in construction declined from 10.8 percent a year earlier to 8.6 percent in May 2014—the lowest rate for the month since 2008. Unemployment among all construction workers had reached 20.1 percent in May 2010.

AGC officials urge Congress and the Obama administration to find a way to keep the federal Highway Trust Fund from running short of money, as forecast, later this summer. Disrupting payments from the Fund would compel many states to halt or cancel outright billions of dollars worth of highway projects during the middle of the busy construction season, they caution.

“Forcing a sudden halt to thousands of projects across the country will undermine much of the growth the construction industry has recently experienced,” affirms AGC CEO Stephen Sandherr. “[It] would cost thousands of construction jobs and force commuters and shippers in many parts of the country to pay for the lost construction season through pothole damages and shipping delays.”

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